Monday, March 5, 2012

IT'S BEEN THREE MONTHS since Shirl Hutton received a free personal computer from LifeMasters, a disease management company, and began using the Internet to track and monitor her heart condition. At 76, she feels more aware and in control of her health thanks to the Internet, but less in control of her new habit: Web surfing and e-mailing her children and grandchildren.

"Being on the Internet is great, but it cut into my reading time, so I've cut hack." said the energetic woman in a recent interview in her sunlit home facing the Pacific ocean in Santa Cruz. Calif. After years of taking medication for a weak heart valve, Hutton. a trim and stylish swimmer and walker, suffered a heart attack a year and a half ago.

LifeMasters, based in Newport Beach and South San Francisco, Calif., was founded in 1994 but just started marketing its programs about a year ago. Initially it is working with its HMO customers to serve patients with congestive heart failure (CHF) and diabetes, but it plans to eventually include those with lung disease and other chronic conditions.

The company appears to be the first player in the field to introduce an Internet component--thanks to an investment by Intel Corp.--to its disease management programs. Some rivals, including Cardiac Solutions, based in Buffalo Grove, ill., are planning to follow suit.

Physicians whose patients enroll in a LifeMasters program lay out a treatment program, and the company's nurses teach patients to monitor their health at home between office visits.

For those who have never used a computer or the Internet, LifeMasters' technical staff offers computer training to get them started. (Beyond the specific Intel-funded pilot programs, LifeMasters does not plan to give away PCs to patients.)

Then, like Ms. Hutton, patients log on daily from home to their password-protected, customized Web site, designed by LifeMasters, and take a few minutes to measure and report their vital signs and answer a few questions regarding their illness.

Patients are assigned a personal LifeMasters nurse (whom the company likens to a personal trainer for weightlifters), who calls them whenever they answer "yes" to the final question or report any aberration.

Nurses also call their patients every week to discuss their health in detail, including their medications and any visits they have made or might need to make to their physician.

LifeMasters executives are betting that, of the estimated 100 million chronically ill patients in the United States, the large percentage who are not in critical condition are healthy enough to use a computer and thereby take more control of their medical care.

Most of the patients it targets are over 50, and many are in their 70s and 80s.

Intel knows well that the elderly are taking to the Internet in droves. That means the promise of more Intel-inside computers, and more internet-aided LifeMasters SelfCare programs in U.S. households down the road.

According to market research firm Jupiter Communications, 14.8 percent of people over 50 have an online account. That number is expected to rise to 33.6 percent in 2003.

Hutton is one of about 150 CHF patients in Santa Cruz whom LifeMasters has enrolled in a pilot study, largely funded by Intel, through Physicians Medical Group.

A third of the patients were randomly selected to use computers to track their disease; another third are using an automated telephone system, and the rest are a control group, receiving daily calls from staff nurses.

Chris Selecky, president and chief executive officer of LifeMasters, said it's too soon to tell if patients using the company's Web-based program are making doctor or emergency room visits with less frequency, but they are clearly entering their vital data at least as regularly as they would using the more conventional interactive voice response (IVR) method.

"Our philosophy is to do whatever it takes to make patients successful," Selecky said. "That's why we use multiple systems--the phone, IVR, the Internet, and eventually paging devices. The Internet is the most cost-effective means."

The advantage of using Internet technology, she said, is that it already exists, it's flexible, it's nearly ubiquitous, and it offers the opportunity for community.

For community-building measures, LifeMasters provides bulletin boards and chat rooms for its Web-connected patients, and it encourages them to contact each other directly and to access health-related Web sites.

Selecky said managed-care companies and agencies have begun embracing the disease management concept in the past six months, partly out of a "huge backlash in public opinion" against HMOs and demands for better care, especially for the chronically ill. As part of that trend, she said, "there's been a real sea change [by health organizations] to incorporate the Internet as a tool."

Rich Jacobsen, an investment banker at Bear Steams who follows the health care industry, said LifeMasters' foray into cyberspace is well timed. With HMOs trying to cut costs, and with doctors less willing to assume the risks they might have accepted a couple of years ago, HMOs are looking for outside vendors such as disease management companies to help them improve care while curbing costs, he said.

"In general, disease management companies are offering the prospect of higher-quality care at lower cost," Jacobsen said. "LifeMasters is ahead of the game, in general, in its move to an Internet-based strategy."

The Internet strategy has helped woo investors, too. LifeMasters has received three rounds of private financing, from Weiss Peck & Greer, Pacific Venture Group, InnoCal, Vantage Point Venture Partners, and Piper Jaffray Ventures; last year Intel added to its health care investments with an undisclosed handout. Other funders did not disclose their amounts either.

And what about an "exit strategy" in this frothy market? "At this stage, I don't want to predict whether the next step will be an IPO or an acquisition or what. We're all certainly open to all those," Ledecky said of LifeMasters, which is unprofitable on top of scant, and undisclosed, revenue.

LifeMasters' key rival, Cardiac Solutions, is less enamored of the Internet. The company serves roughly 10,000 chronically ill patients, most of them suffering from heart failure.

Jean Fultin, head of marketing for Cardiac Solutions, said the company plans within the next year and a half to incorporate some aspects of Internet technology into its programs.

"We'll incorporate technology where it makes sense," Fultin said. "One pitfall of technology is that with some disease states commingled (diabetes and congestive heart failure, for instance), lots of human intervention is needed to pick up on subtle questions."

IT'S BEEN THREE MONTHS since Shirl Hutton received a free personal computer from LifeMasters, a disease management company, and began using the Internet to track and monitor her heart condition. At 76, she feels more aware and in control of her health thanks to the Internet, but less in control of her new habit: Web surfing and e-mailing her children and grandchildren.

"Being on the Internet is great, but it cut into my reading time, so I've cut hack." said the energetic woman in a recent interview in her sunlit home facing the Pacific ocean in Santa Cruz. Calif. After years of taking medication for a weak heart valve, Hutton. a trim and stylish swimmer and walker, suffered a heart attack a year and a half ago.

LifeMasters, based in Newport Beach and South San Francisco, Calif., was founded in 1994 but just started marketing its programs about a year ago. Initially it is working with its HMO customers to serve patients with congestive heart failure (CHF) and diabetes, but it plans to eventually include those with lung disease and other chronic conditions.

The company appears to be the first player in the field to introduce an Internet component--thanks to an investment by Intel Corp.--to its disease management programs. Some rivals, including Cardiac Solutions, based in Buffalo Grove, ill., are planning to follow suit.

Physicians whose patients enroll in a LifeMasters program lay out a treatment program, and the company's nurses teach patients to monitor their health at home between office visits.

For those who have never used a computer or the Internet, LifeMasters' technical staff offers computer training to get them started. (Beyond the specific Intel-funded pilot programs, LifeMasters does not plan to give away PCs to patients.)

Then, like Ms. Hutton, patients log on daily from home to their password-protected, customized Web site, designed by LifeMasters, and take a few minutes to measure and report their vital signs and answer a few questions regarding their illness.

Patients are assigned a personal LifeMasters nurse (whom the company likens to a personal trainer for weightlifters), who calls them whenever they answer "yes" to the final question or report any aberration.

Nurses also call their patients every week to discuss their health in detail, including their medications and any visits they have made or might need to make to their physician.

LifeMasters executives are betting that, of the estimated 100 million chronically ill patients in the United States, the large percentage who are not in critical condition are healthy enough to use a computer and thereby take more control of their medical care.

Most of the patients it targets are over 50, and many are in their 70s and 80s.

Intel knows well that the elderly are taking to the Internet in droves. That means the promise of more Intel-inside computers, and more internet-aided LifeMasters SelfCare programs in U.S. households down the road.

According to market research firm Jupiter Communications, 14.8 percent of people over 50 have an online account. That number is expected to rise to 33.6 percent in 2003.

Hutton is one of about 150 CHF patients in Santa Cruz whom LifeMasters has enrolled in a pilot study, largely funded by Intel, through Physicians Medical Group.

A third of the patients were randomly selected to use computers to track their disease; another third are using an automated telephone system, and the rest are a control group, receiving daily calls from staff nurses.

Chris Selecky, president and chief executive officer of LifeMasters, said it's too soon to tell if patients using the company's Web-based program are making doctor or emergency room visits with less frequency, but they are clearly entering their vital data at least as regularly as they would using the more conventional interactive voice response (IVR) method.

"Our philosophy is to do whatever it takes to make patients successful," Selecky said. "That's why we use multiple systems--the phone, IVR, the Internet, and eventually paging devices. The Internet is the most cost-effective means."

The advantage of using Internet technology, she said, is that it already exists, it's flexible, it's nearly ubiquitous, and it offers the opportunity for community.

For community-building measures, LifeMasters provides bulletin boards and chat rooms for its Web-connected patients, and it encourages them to contact each other directly and to access health-related Web sites.

Selecky said managed-care companies and agencies have begun embracing the disease management concept in the past six months, partly out of a "huge backlash in public opinion" against HMOs and demands for better care, especially for the chronically ill. As part of that trend, she said, "there's been a real sea change [by health organizations] to incorporate the Internet as a tool."

Rich Jacobsen, an investment banker at Bear Steams who follows the health care industry, said LifeMasters' foray into cyberspace is well timed. With HMOs trying to cut costs, and with doctors less willing to assume the risks they might have accepted a couple of years ago, HMOs are looking for outside vendors such as disease management companies to help them improve care while curbing costs, he said.

"In general, disease management companies are offering the prospect of higher-quality care at lower cost," Jacobsen said. "LifeMasters is ahead of the game, in general, in its move to an Internet-based strategy."

The Internet strategy has helped woo investors, too. LifeMasters has received three rounds of private financing, from Weiss Peck & Greer, Pacific Venture Group, InnoCal, Vantage Point Venture Partners, and Piper Jaffray Ventures; last year Intel added to its health care investments with an undisclosed handout. Other funders did not disclose their amounts either.

And what about an "exit strategy" in this frothy market? "At this stage, I don't want to predict whether the next step will be an IPO or an acquisition or what. We're all certainly open to all those," Ledecky said of LifeMasters, which is unprofitable on top of scant, and undisclosed, revenue.

LifeMasters' key rival, Cardiac Solutions, is less enamored of the Internet. The company serves roughly 10,000 chronically ill patients, most of them suffering from heart failure.

Jean Fultin, head of marketing for Cardiac Solutions, said the company plans within the next year and a half to incorporate some aspects of Internet technology into its programs.

"We'll incorporate technology where it makes sense," Fultin said. "One pitfall of technology is that with some disease states commingled (diabetes and congestive heart failure, for instance), lots of human intervention is needed to pick up on subtle questions."